Even worse is the outlook, with Groupon expecting to break even on flattish revenues of between $560 million and $610 million in the first quarter.

Groupon held a call with analysts at 5 p.m. Eastern. We took notes live (archived below).

It's a high-pressure time for CEO Andrew Mason, who is clearly under pressure to keep his job and show that the company can show predictable growth.

Groupon's top rivals in the daily-deals space, LivingSocial, just raised $110 million in financing from existing investors on onerous terms that valued the company at far less than earlier financings.

And Google just made it far easier for all of its advertisers to do daily-deals and discounts alongside other online ad formats.

So the entire sector's under pressure.

That said, Groupon stock has risen sharply since bottoming out at $2.60 in November. It's up 8.3 percent today, closing above $6 for the first time since August.

Sterne Agee analyst Arvind Bhatia has set a $9 price target on the company. In a research note, he says that the figures to watch are:

• whether the core daily-deals business turns around (it declined in the third quarter);• whether Groupon Goods, a direct-to-consumer e-commerce business, continues posting sharp growth;• and what happens with marketing costs, particularly spending on search ads.

Here's a quick scorecard on how Groupon did against those measures:

• Third-party revenues—primarily the daily email deals Groupon is best known for, continued a year-over-year decline, dropping from $478 million in the fourth quarter of 2011 to $413 million in the most recent quarter.• Direct revenues—primarily Groupon Goods, the e-commerce business where Groupon sells directly to consumers—continued to rise sharply. At $225 million in the fourth quarter, they're getting close to $1 billion in annualized sales. (Last year, the business was nascent, so year-over-year comparisons seem silly.)• Marketing expenses dropped by 61 percent to $61 million in the quarter, while Groupon continued to grow its total customers to 41 million, a 22 percent increase.

Questions starting.

Raman: "We are not building a company. We are building a category."

Child: "We have added more merchants to our platform than in any quarter in our history."

Great question from Arvind Bhatia: If deals are no longer time-limited will consumers feel urgency to buy?

Mason says research showed that wasn't why buyers bought on Groupon.

Says Mason: "The reason why people buy Groupons is not some game mechanics. It's because of the real value that these offers provide. Instead of shocking people into buying something they had no intention of buying ... it's a much larger business opportunity."

Another hint about layoffs: Child mentions "cost structure."

Raman is talking about "growing in a fiscally responsible way."

Mason describes how Groupon can grow.

"What you saw in the fourth quarter was our recognition that there are a few different ways we can grow in this business. One is through marketing. Another is passing savings on to merchants and adding higher-quality merchants who attract customers to the platform.... We're expecting to use these two levers to grow billings and revenues in 2013."